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Purchasing And Supply Management 16Th Edition By P. Fraser Johnson - Test Bank
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,Purchasing and Supply Management, 16e (Johnson)Chapter 1 Purchasing and Supply Management
1) Supply decisions can affect:
A) the balance sheet.
B) the income statement.
C) the income statement and the balance sheet.
D) neither the income statement nor the balance sheet.
E) none of the financial metrics.
Answer: C
Difficulty: 2 Medium
Topic: Size of organizational spend and financial significance
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
2) On average, the dollars spent with suppliers as a percent of revenues:
A) is greater in manufacturing organizations than in service organizations.
B) is about equal in service and manufacturing organizations.
C) is greater in service organizations than in manufacturing organizations.
D) depends on the type of manufacturing process.
E) depends on the type of service delivery system.
Answer: A
Difficulty: 1 Easy
Topic: Size of organizational spend and financial significance
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,3) The role of supply management is best captured by the following question:
A) How can supply help suppliers decrease costs?
B) How can supply and suppliers help decrease costs and increase revenues?
C) How can supply and suppliers help decrease costs?
D) How can supply help decrease costs and increase revenues?
E) How can supply help decrease costs?
Answer: B
Difficulty: 2 Medium
Topic: Supply contribution
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
4) To contribute to organizational strategy, the supply department should:
A) set realistic expectations for internal customers.
B) execute tasks as designed.
C) standardize and automate transactions.
D) streamline business processes.
E) seek opportunities to provide competitive advantage.
Answer: E
Difficulty: 2 Medium
Topic: Supply contribution
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
5) The impact of supply management actions on the balance sheet is measured by the:
A) return on investment effect.
B) return on inventory effect.
C) inventory turnover effect.
D) return on assets effect.
E) profit leverage effect.
Answer: D
Difficulty: 1 Easy
Topic: Return-on-assets effect
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 6) Evaluation of the supply function's contribution to organizational goals and strategies can be
viewed in the context of:
A) operational and strategic.
B) strategic and transactional.
C) direct and indirect.
D) both A and B above.
E) both A and C above.
Answer: E
Difficulty: 1 Easy
Topic: Supply contribution
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
7) The profit-leverage effect of supply savings means that:
A) effective price negotiations with a supplier will lower the supplier's profits.
B) a reduction in purchase spend increases profit more than an equivalent increase in sales.
C) the buyer gains leverage over suppliers when purchases are increased.
D) efficient supply management processes will increase profits.
E) a reduction in money tied up in inventory improves profits.
Answer: B
Difficulty: 2 Medium
Topic: Profit-leverage effect
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
8) As supply chains have become more global, the risk of supply disruptions has:
A) increased because emerging economies lack the business ethics of developed nations.
B) stayed the same because the issues are similar wherever suppliers are located.
C) decreased because risk is spread among suppliers all over the world.
D) increased because of financial and exchange rate fluctuations.
E) decreased because there are global standards for labor and safety.
Answer: D
Difficulty: 2 Medium
Topic: Risk management
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
Gradable: automatic
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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